Nikkei slides to near 3-week low on stronger yen

Joshua Hunt

3 MIN. DE LECTURA

TOKYO, May 2 (Reuters) - Japanese stock indexes tumbled to near a three-week low on Monday morning after the yen hit a fresh 18-month high against the dollar, hurting the profit outlook for exporters and other shares with profits tied to a weak yen.

The Nikkei share average fell 3.6 percent to 16,069.71 in late morning trade, and hit its lowest point since April 12.

The yen climbed to an exchange rate of 106.14 yen per dollar after the U.S. Treasury put Japan on a new currency monitoring list along with four other countries that have large trade surpluses with the United States. The report could make it harder for Japan to intervene in currency markets to stem the yen’s gains.

“We’ve started the week with a precipitous drop in Japanese equity as the market responds to the strength of the yen,” said Martin King, co-managing director at Tyton Capital Advisors.

“The Bank of Japan’s decision last week not to extend easing polarized the market and at the moment the voice of the bears is louder. Many will be asking what can be done to depreciate Japan’s currency this time as the BOJ has already come close to exhausting its tool-kit.”

Shares of Takata Corp fell more than 10 percent after a report said more than 100 million vehicles are likely to be subject to recall globally due to air bag inflators made by the troubled Japanese firm.

The broader Topix declined 3.5 percent to 1,293.11 in late morning trade while the JPX-Nikkei Index 400 slid 3.6 percent to 11,683.53. (Reporting by Joshua Hunt; Editing by Richard Pullin)